Sebi to set up investor protection fund: Damodaran

Market regulator Securities and Exchange Board of India (Sebi) is in the process of raising resources for setting up an investor protection fund.

The fines and penalties levied on listed companies would be used to set up the fund, M Damodaran, chairman of Sebi, said on the sidelines of a CEO summit.

For the fund, the SEBI Act 1992 would have to be amended, he said.The draft of the proposed new Act had been sent to the inter ministerial committee, which would later be placed before Parliament either towards the end of the current session or during the budget session, he said.

By the second half of 2007, the bill is likely to become an act, he said, adding the new act would be on the lines of US Security Act.By mid-07, the market regulator would be conducting a country-wide massive investor education programme to educate small and retail investors, he said.

Sebi is also in the process of simplifying the process of delisting of sick and closed-down companies. A draft scheme for facilitating de-listing has been put up on the Sebi website and responses are awaited, he said.